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COVID-19 Update in Nigeria
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4 cryptos gain over 400% in a month, far outperforming Bitcoin
Naira remains stable across forex markets as external reserve continues to rise
Oil prices tumble on fears of global economic recovery
Financial Services
Union Bank announces closed period as it readies to release H1 2020 result
Union Bank reported a profit after tax of N6 billion in Q1 2020.
Union Bank of Nigeria Plc has informed the Nigerian Stock Exchange (NSE) and other stakeholders about the commencement of its closed period, which will start today and last until 24 hours after the company’s H1 2020 unaudited financials are eventually made available to the public.
A public disclosure that was sent to the NSE also notified stakeholders that Union Bank’s board of directors are set to meet on Thursday, July 23rd, 2020 to deliberate on and approve the half-year financial statements.
Meanwhile, in view of the closed period, therefore, all directors and employees of the bank, as well as all other insiders, shall be prohibited from buying and selling the bank’s shares on the NSE. This is in compliance with the rule book of the Nigerian bourse.
The statement by Union Bank said:
“In compliance with the NSE Rule Book and the Amendments to the Listing Rules, Union Bank of Nigeria Plc (“the Bank”) hereby notifies The Nigerian Stock Exchange (“The Exchange”) and our esteemed stakeholders that the Board of Directors of Union Bank of Nigeria Plc (“the Board”) is scheduled to approve the Unaudited Financial Statements for the half-year period ended 30th June 2020 on Thursday, 23rd July 2020.
“Consequently, there will be a closed period in respect of which no insider of Union Bank of Nigeria Plc may buy and or sell shares of the Bank from 8th July 2020 to twenty-four (24) hours after the filing of the Unaudited Financial Statements with The Exchange.”
Recall that Union Bank released its Q1 2020 financial statement back in April this year, reporting gross earnings of N43.9 billion for the period; a 16.5% increase from N37.6 billion reported in Q1 2019. In the same vein, profit after tax from continued operations also increased from N4.9 billion in Q1 2019 to N6 billion in Q1 2020.
Union Bank’s stock closed yesterday’s trading session on the Nigerian Stock Exchange at a share price of N5.45. Year to date, the stock has gained by roughly about 10%.
Debt Securities
Interest rates will remain low until the end of H1 2021 – Meristem Securities
Meristem Securities has argued that interest rates will remain low until, at least, the end of H1 2021.
Meristem Securities has asserted that interest rates will remain low until, at least, the end of H1 2021.
This statement was made at the recently held webinar on Global Economy and Outlook, which the company themed: Bracing for a Different Future.
Although the company acknowledged that there is mounting pressure for upward movement in yields from several stakeholders, it appears the company concurs nothing concrete is in sight.
This line of reasoning seems to have influenced their decision to advise investors to move away from Treasury instruments.
What they are saying
Meristem advises that:
- “Buy and hold strategy investors seeking to generate above average returns should move away from risk free Treasury instruments and focus on investment grade commercial papers and bonds which satisfy investment objectives.”
- “Active traders with higher risk appetite are advised to focus on high-yield short duration instruments, which would be re-invested into a higher yield environment should rate reversals occur.”
The advice regarding shunning Treasury instruments appears to be in order, considering that treasury bill rate has been declining, with the latest figure — November 2020 — 0.03% as per the CBN monthly interest rate data.
Further checks from the Debt Management Office website, indicates that the latest figures for Eurobonds and Diaspora bond fall short of the fixed yield at issue for all the different categories of bonds in issue.
What you should know
Latest figures from the CBN’s monthly interest rate indicate that:
- Treasury bill rate has been on a steady decline for six months, down to 0.03% since the last rise (2.47%) in May 2020.
- Fixed deposit rates (one, three, six and twelve months) have also been declining – the latest figures for these indicate that in November 2020, one-month deposit rate was 1.92%, 2.9% for three months, 2.84% for six months, and 4.89% for 12 months.
- Compared with the corresponding period in 2019, the figures indicate that these rates fell by 75%, 66%, 71% and 49% respectively.
Financial Services
CBN issues framework for QR payments
CBN has issued a framework that would guide Quick response (QR) code payments in Nigeria.
The Central Bank of Nigeria has issued the framework that would guide Quick Response (QR) Code Payments in Nigeria.
This is a proactive move by the Apex bank towards ensuring the safety and stability of the Nigerian Financial System, as well as promoting the use and adoption of electronic payments and foster innovation in the payments system.
READ: Over 1 million people took loans from banks below 20% interest rate in 1 year- CBN
Quick Response (QR) Codes are matrix barcodes representing information presented as square grids, made up of black squares against a contrasting background that can be scanned by an imaging device, processed and transmitted by appropriate technology.
The codes are used to present, capture and transmit payments information across payments infrastructure and further enable the mobile channel to facilitate payments and present another avenue for promoting electronic payments for micro and small enterprises.
READ: Binance offers DeFi coders $100,000; DeFi market value hits $8 billion
What you should know
- Quick Response (QR) codes are two-dimensional bar codes. QR code payments allow merchants to receive payments from customers simply by scanning generated QR codes using a smartphone camera. The QR code payments carry the purchase transaction information to the mobile device of the buyer/customer.
- Making payments via QR codes is very secure. It is because the QR code is nothing but just a tool that is used to exchange information. Any data which is transferred via QR codes is encrypted, thus making the payment secure.
- The Participants in QR Code Payment in Nigeria include Merchants, Customers, Issuers (Banks, MMOs and Other Financial Institutions), Acquirers (Banks, MMOs and Other Financial Institutions) and Payments Service Providers.
- QR payments are increasingly becoming a popular means of payments in Nigeria, and some industry players would see the framework as a perfect way of regulating the sector.
- QR codes are capable of storing lots of data. But no matter how much they contain, when scanned, the QR code should allow the user to access information instantly. It can be used for payments, sharing contacts and Wi-Fi passwords and lots more.
- The popular and common argument is that since POS machines are expensive, cheaper options such as QR scanners should be pushed forward to local traders.
READ: Telecoms, FSI to hugely boost Nigerian Economy in 2021 – CWG’s Business Director
Financial Services
CBN unveils framework for regulatory sandbox operations
CBN has issued a regulatory Sandbox framework towards engaging with the operators in the Fintech space.
